A study by three economists from the University of Miami, the University of California Berkeley, and the University of California Santa Barbara projects that demand for health care by previously uninsured young adults will rise dramatically because of national health care reform.  Under the Patient Protection and Affordable Care Act, parents may include dependent children on their insurance plans up to age 26.  The study found that young adults’ demand for health care drops significantly when they lose their parents’ coverage and projects that reform will dramatically increase the quantity of care provided to those currently uninsured individuals.  Roughly 45 percent of individuals aged 19 to 29 were uninsured for at least part of 2009, making that age group one of the largest groups of uninsured Americans.

From the report:

Substantial uncertainty exists regarding the causal effect of health insurance on the utilization of care. Most studies cannot determine whether the large differences in healthcare utilization between the insured and the uninsured are due to insurance status or to other unobserved differences between the two groups. In this paper, we exploit a sharp change in insurance coverage rates that results from young adults “aging out” of their parents’ insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Using the National Health Interview Survey (NHIS) and a census of emergency department records and hospital discharge records from seven states, we find that aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that not having insurance leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions. The drop in ED visits and inpatient admissions is due entirely to reductions in the care provided by privately owned hospitals, with particularly large reductions at for profit hospitals. The results imply that expanding health insurance coverage would result in a substantial increase in care provided to currently uninsured individuals.

Full report: http://www.nber.org/papers/w15823 

The National Bureau of Economic Research. (2010). The effect of health insurance coverage on the use of medical services. Anderson, M., Dobkin, T. and Gross, T.